Moody's Investors Service on Friday assigned a long-term domestic and foreign currency deposit rating of Caa2 with a stable outlook, and a short term domestic and foreign currency deposit rating of Not-Prime (NP) to Pancretan Cooperative Bank Ltd.

At the same time, Moody's has assigned a baseline credit assessment (BCA) and an adjusted BCA of caa3 to Pancreta Bank. This is the first time that Moody's has assigned ratings to Pancreta Bank.

The rating agency said that the bank's BCA reflects certain fundamental credit challenges including its high level of problem loans, combined with relatively weak regulatory capital metrics, balanced by the bank's favourable funding profile and positive earnings track record during very difficult economic conditions. In addition, the bank's deposit rating is mainly driven by its strong deposit pool in its home market, which provides a relatively good protection to senior creditors and preferred depositors.

The bank is the smallest among all rated Greek banks, with a market share of only around 0.5 pct on a national level.

The outlook on the bank's deposit ratings is stable, balancing the bank's earnings performance combined with a good local deposit franchise, against the bank's weak asset quality with very high levels of NPEs and relatively low provisioning coverage.